The-Yellow-Rose-Street-Beat

Potash Corp.: No Liquidity Problems Here

propped

Potash Corp.: No Liquidity Problems Here

But what if the credit card company demands immediate payment, won't accept the home as collateral, and wants to be paid now up front?

These are unprecedented times. That being said I think POT is still in very good shape and represents a great layer in buy for those with a very long term horizon or a great day trade (long or short) for those with a very short term horizon.

For those long stocks the real problem here are the hedge funds and investors who proped this stock up with leveraged money and now have to clean ship. When POT was trading at 200 it was still cheap relative to earnings. How can a company with a PEG under 1 be a bubble stock? The answer is that all stocks are bubble stocks to some degree. Those who get in early or those who get in later are fine as long as their continues to be people on the sidelines who think that the stock will go up. The moment the selling overwhelms the buying (seen by the breaking of key technical indicators) every stock that has gone up is on the wrong side of the bubble. It's just that simple.

Earnings are just one indicator of stock demand.

For that reason, as I have learned, when the charts turn and the trend is down it is usually time to get out unless one plans to invest for a decade or so or more and believes the price is good. No stock is an exception. They are all just pieces of paper and risk management, maximum loss limits, etc. must be predefined when getting in regardless of fundamentals when the charts do not point in one's favor (on the long or short side).

Trying to Defend Mosaic

BTW Mish... great blog. I've been following it for some time.

Trying to Defend Mosaic

I've been following these stocks intently for quite a while and own shares in both MOS and POT. This is really about the hedge funds. It's a scheme that has made certain people/companies a lot of money. A lot of the hedge funds use computers that look for phenomenal earnings stories like these. This propelled the stocks earlier in the year. However, unlike most retail investors, the hedge funds acted ina completely irresponsible manner and levered to the hilt to supercharge returns (without hedging of course). You know this already right?

What may not be as obvious is that the downturn here may have been planned. I have found articles about the forced deleveraging but as I an not in NY the following is just a theory on my part... but one that makes a lot of sense. A group of smart hedge funds/big money may have purposefully sold at higher levels and shorted the stock to drive the price down. The result would be margin calls on overleveraged hedge funds and forced selling... which would drive the price lower and cause more forced selling... at which point the stocks would be further shorted... etc. etc. etc. Then you get bankruptcies (i.e. ala Ospraie) which cause fear and selling and more selling and the cycle goes on until some catalyst comes in (like the original bail-out proposal which bumped these stocks for a while... or the POT announcement of increasing buybacks etc. ) Ultimately the selling comes back on line and probably will until real money (i.e. cash) replaces the huge leveraging.

It's kind of like the short on currency in Asian countries in the 90s or the Soros/Rogers attack on the Pound in the early 90s (read about black Wednesday on Wikip).- when there is too much weakness for any reason the savvy and powerful smell blood. I think that many retail investors, including me, that knew nothing about all of this saw great companies whose earnings were likely largely resistant to the recession and have been unfortunate enough to be unwittingly involved in the war games of the rich and powerful.

Its like nothing I have ever seen before. Lesson learned. Still, in the long long run markets cannot be manipulated. Just ask Dow.

An In-Depth Look at Solar Stocks

its value. Typo...

An In-Depth Look at Solar Stocks

Some replies:

First and foremost I want to make a brief comment to GH. How is bashing Seeking Alpha helpful to anyone? There are some very intelligent posts on here. Not all... but some very good ones. In fact, when I am trying to learn about a company I am not familiar with I first look at the charts, then the key statistics/analyst estimates, and then go directly to the financial blogs in yahoo. Many are Seeking Alpha articles.

The blogs offer the retail investor a deeper look... if you don't like, don't agree, or already know everything written in them then don't read them! However, what you will not tend to find is unwarranted, self-driven bashing (often the case in message boards). Also, it is not the voice of "authority"... which is a good thing because many of the analysts I believe have their own agendas. The ISRG downgrade at 250? I called that a bluff (on my site) because I know ISRG has a solid business and I know that the stock keeps getting downgraded by some analyst for the same reason and then rises before earnings. It is up 10% since the "downgrade"... a nice little trade.

Everyone has to be able to think for themselves here. If you're looking for an "authority figure" you will either have to pay them a lot of money (and they may still be wrong) or you have to wonder if they are really acting in your best interest. The Seeking Alpha articles include thoughtful information in a concise place. Not bad.

Ok... now that I got that out of my system...

Aalen: Conference calls are like body language: it tells you the tone of the conference, how people feel about the company, and whether people really are impressed or not. The TSL CC is a perfect example. When GS asks questions I listen. When they gave a disapproving hint about the cash flow generation that meant TSL was in trouble at least short-term. The downgrade did not surprise me bc of the CC.

The CC also tells you about the management, details, so much there

Puerlfan:
Excellent points. This is why an article like this can be valuable... their are people who know thin film and other facets of the solar industry like no one else. I have to admit the prices of FSLR and ENER had me focus more on silicon based then thin film... however when one looks at the dependability and cash flow of the thin films (FSLR at least) it becomes clear why institutions have been holding them more so far overall.

frflyr: Solar will be there but don't discount wind or any of the others... There's a reason T.Boone Pickens is investing so much in wind farms... also nice addition with the info

Others: If I didn't mention your stock in detail it is because I chose to look at a reasonable group of stocks and focus primarily on those that are currently profitable. I expect that there will eventually be pruning and consolidation in this industry and that it is still too early for anyone to tell how it will work out. For now all are in play... solid fundamentals and cash flow are pluses... but so is new technology.

Overall... if this article taught you anything you did not know or made you think then it was successful in its aim. Think of Seeking Alpha and other blog sites as an investment community and a place to generate and share ideas... not the final stop in decision making... and I think you will be more likely to unlock it's value and succeed.

An In-Depth Look at Solar Stocks

I will try to answer some of the other questions posed this weekend

An In-Depth Look at Solar Stocks

GH:
It's interesting that seeking alpha chose this title for the article. The original article on my blog is titled: Long Term Bull Market-Solar. I am appreciative of Seeking Alpha for creating a forum to express and share ideas... however I personally would not have been quite as bold in my title...

I have a background in biochemistry (UCLA)and actually am best acquainted with the bioscience and pharma... although I have used my scientific knowledge and thinking to sharpen focus on broader swabs of the market. You will find the science breakdown included and also that as I mention this is not the "be all end all article", if there is such a thing, but intended as an investigative glimpse that is meant as a foundation to be built upon over time. I already added a subsequent follow up article on the issue of cash flow and the GS downgrade of TSL at the end of the article (under top posts)-LT Bull Market Solar. I expect to add more over time as I see solar being around for a long time to come...

UBS Analyst: Survey Shows 3G iPhone Poses Little Threat to BlackBerry

Just for fun I added a survey on RIMM vs AAPL on my site. It's on the right hand side if you scroll down a bit. I have to believe the results will be at least as informative as those presented in the article...

UBS Analyst: Survey Shows 3G iPhone Poses Little Threat to BlackBerry

Businesses care about productivity, dependability, and price. Especially in tough economic conditions. Does the Iphone make employees more productive? Perhaps... however the honus is on AAPL to unseat the champ. With such a huge potential market internationally and so much money being spent on RD RIM is still in the drivers seat. The stock haircut was to be expected but at some price RIMM becomes a bargain even if you imagine the worst case scenario.... it getting close at aroung 100 a share in my opinion...

BTW for those interested google the Yellow Rose Street Beat or click on the website to the left. Many have told me the site is informative and it is fun...

Owens-Illinois Continues to Grow

to the left of the page rather.

Owens-Illinois Continues to Grow

I am looking heavily at OI and plan do listen to the last CC and investigate further. We are in a bear market and many are concerned about the transportation costs eating into margins and perhaps other factors (is glass more expensive than plastic?)...

John Montgomery, one of my favorite mutual fund managers, has held this for quite some time based on its quants. I still have to do the heavy DD but it is looking very promising...

BTW... for those interested I have a financial website at the address above.......

A Missed Opportunity in Canadian Solar

I never buy a co. without listening to at least one CC. I listened to CSIQ's in early Spring (somewhere around there... when the stock was at 19) and I could tell immediately that this was a top flight company. That it would double in a few months... that I didn't know,,, but so much can be gleaned from conference calls... time and time again.

It's Not Too Late to Buy Coal

The run has been huge and a pullback will come but here's a tidy recipe...

By some with GTC stops. If the trend reverses the losses are calculated and minimal. If the trend continues move up the stops...

Potash, Mosaic Are Looking Fertile

I have never ever ever ever heard a CC like POT last one. I mean, it was beyond the point of "great quarter guys". It was: we've been waiting 20 years as a company for this moment to arrive and now it has. The growth here will be scary good. Even with the run-up.

Yet POT will likely fall due to one major factor: Sector Rotation. AG and Oil sectors have been the place the big money has chosen as the safe haven in recent times. They have run enormously and the money has to go elsewhere for a bit. In fact I think that POT and MOS and AGU would have fallen further if not for the unbelievable quarters. If your willing to deal with some short-term stock price drops the dips here represent buying opportunities. However I like the author would buy in pieces here... I am considering opening a small position here and would add more if it drops to the 170s or lower...